ANALYSIS | CHEMICAL RECYCLING


Issues facing the builders of the chemical recycling industry


AMI Consulting is publishing quarterly updates of its Chemical Recycling Global Status report. Here Silke Einschuetz provides some insights into recent developments in the embryonic sector.


In AMI’s industry analysis published last autumn we wrote that we felt that the chemical recycling industry had reached a significant threshold. Following many years of developments and announcements the first facilities had started operations, and a significant number of additional plants were scheduled to start up imminently and during 2023. Even larger capacities were in the pipeline and scheduled to become operational during the forecast period to 2030. We also wrote how,


across the industry, there appeared to be a feeling that the time had come to deliver. Past years had been characterised by delays and, in some cases, abandoned plans. The Covid-19 pandemic was partly to blame for this. Now, supply chain partners were keen to see facilities starting operations, proving that the relevant technologies could be scaled up to operate in an efficient and financially viable manner. This sentiment was


strongly repeated at both our US and European Chemical Recycling confer- ences earlier this year – from


16 IMAGE: REVALYU


Revalyu has broken ground on its first glycolysis chemical recycling facility in the US located at Gateway Regional Park in Statesboro, GA


across the value chain we heard that the industry needs success stories to generate much needed investments. And indeed, as we found when publishing the first quarterly update of AMI’s report Chemical Recycling Global Status, the six months between Septem- ber 2022 and March 2023 were characterised by a significant number of big announcements regarding plans for capacity expansion and new sites. However, the three months between April and June 2023 had a much quieter tone to them. It could clearly be felt that the challenging macroeco- nomic conditions, rising inflation, continuing geopolitical uncertainty, and not least the still pending final decision on the accounting rules for the application of the mass balance method took their toll, slowing down invest- ment flows and forcing


PLASTICS RECYCLING WORLD | October 2023


some companies back to the drawing board. A challenging situation for many players, especially as costs had increased significantly, no longer reflecting assessments made during initial feasibil- ity studies. Nevertheless, clear


progress was made by many companies within the industry in their site devel- opments and permitting processes, or in obtaining much needed investments. And, maybe most signifi- cantly, new partnerships were forged, in particular for securing the required feedstocks for facilities due to become fully operational in the short to medium term.


Pushing demand The driver for these devel- opments is demand. In Europe in particular the European Commission’s ambitious recycled content targets formulated in the draft proposal for the new


Packaging and Packaging Waste Regulation (PPWR) have highlighted the fact that mechanical recycling alone will not be able to supply sufficient volumes of recyclates to meet targets, especially where food contact materials are concerned. In Europe alone, AMI’s


report Mechanical Plastics Recycling Europe has identified a 3,919 kt gap in mechanical recycling input capacity to 2030, requiring investments of €4.7-5.9bn based on CAPEX per tonne costs as estimated by the European Investment Bank. To produce recyclates suitable for food contact applications, and to gener- ate higher volumes of recyclates from materials unsuitable for mechanical recycling, the development of chemical recycling capacity is needed. What is urgently required now is legal certainty as it is not long until the PPWR and its


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